An Analysis of Customer Loyalty: A study on Bangladesh Telecommunication Industry

Abstract

Relationship marketing is a strategy designed to promote customer loyalty, interaction and long-term engagement with customers by providing them with information directly suited to their needs and interests and by promoting open communication. While a vast number of studies have pointed out the keys of relationship marketing practices in consumer markets, little attention has been paid to the value the organization can get from such strategies in the market. The purpose of this research is to produce some evidence of the association between customer relationship marketing strategies which are attraction activities and Loyalty programs (Bonus, Contact, Customer satisfaction, Contact) and the market performance. The proposed hypotheses are tested in the case of telecommunication service firms, where long-term relationship is needed. This research involved collecting data to understand the relationship exists between attraction and loyalty programs (Bonus-Contact-Satisfaction and complaint) with market performance of the companies and the market performance is measured by market position, customer perception about the firm and customer’s loyalty. Furthermore, this means that, loyalty and interaction programs are more influential on companies’ awareness and penetration in the market (market position). Attraction activities (service quality) has greater impact on customer’s perception, however bonus and customer satisfaction are more associated with customers’ loyalty also customer satisfaction has greater impact on customers’ loyalty than service quality. The study employed a survey as its research design, making the results statistically significant even when analyzing multiple variables. The population of interest comprised individuals who obtain services from the mobile telecommunication companies in Bangladesh. A sample size 7 of 40 respondents was utilized. With a target sample of 40 respondents, a sample distribution per each company was based on the percentage market share of each company. This study collected primary data from customers using a questionnaire to collect the data. Statistics technique was used to analyze the quantitative data. The study has collected the perceptions of 40 mobile subscribers through self administered survey questionnaire. The result shows that’ a significant linear relationship exists between service quality and customer satisfaction. The result also shows that service quality, switching cost, and trust are significant predictors of customer loyalty. Bangladesh is a very lucrative market for mobile telecommunication because of huge customers it has. This opportunity is attracting the foreign giants to enter into this market; as a result the competition is getting intense day by day. To cope with the situation the mobile telecommunication service providers of Bangladesh Telecommunication Industry are seriously considering customer expectations, service quality and other add-on-services. This research demonstrates how the local and international mobile telecommunication service providers are trying their best to bring the services to the satisfactory level for the demanding customers. It also analyses how the MTSPs are customizing their offers as per the necessity of the prospective customers. The service providers are going for segmented marketing and trying to develop focused marketing programs so that they can reach and offer the superior service to the targeted segment. When an MTSP is targeting the young segment another MTSP is targeting the ladies segment. This paper analyses the collected information about the expectations of the customers of mobile telecommunication service and tries to find out the factors affecting selection of an MTSP and subsequently lays out some recommendations to the mobile telecommunication service providers (MTSPs).In the context of service oriented organization, trust is the most significant predictor of customer loyalty. The study found 8 that, the quality of a service is subjectively perceived by customers during the interactions with a firm and has critical impact on customers’ evaluation of service quality. The study also found that effective communication of pricing policies as well as flexible pricing for various services offered play a great role in customer loyalty. The study further concluded that a positive brand image makes it easier for a firm to convey its brand value to consumers and also generates favorable customer loyalty among people. This study recommends that businesses operating in an intensely price based competitive environment, dependent on high economies of scale and with low levels of staff-customer interaction are bound to suffer in their market positions and profitability unless huge investments are made in more relational strategies like building trust, commitment, communication and satisfaction.